Construction company Royal BAM Group has announced a major restructuring programme in order to mitigate lower revenue caused by Covid-19 and selective tendering.
In a press release BAM said that it expects this programme to result in cost savings of €100 million (US$117 million) annually and that the majority of savings will come from headcount reductions.
The executive committee at Royal BAM group announced in July plans to wind up its BAM International subsidiary, the company that operates outside of BAM’s European home markets after an expected loss of between €130 million (US$152 million) and €150 million (US$176 million) in its half-year results.
“Given the impact of the Covid-19 pandemic and the disappointing results over the first half year, we are taking decisive action to structurally improve our profitability,” said CEO Ruud Joosten.
“Although this is a painful decision for employees concerned, it is a necessary step in order to improve BAM’s financial performance. At the same time, we are defining our new strategic agenda in order to create more value for our shareholders and solid prospects for all our stakeholders, including our employees.”
Subject to the outcome of the discussions with works councils and trades unions, BAM expects to implement the programme in the next six months, leading to significant savings already in 2021.
BAM will publish a trading update for the first nine months of 2020 on November 5, 2020.